Steemit Crypto Academy Contest / S6W5 - Common Crypto Scams And How To Avoid Them

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Hello dear friends,

In this week of the engagement challenge, We have been given the chance to speak about crypto scams. So let me share what i feel about crypto scams and the ways of avoiding them.

Explain Your Understanding Of Crypto Scam

Crypto can be defined as a volatile investment method. There are many cryptocurrencies that change their value in sudden moments. Sometimes the value is high and sometimes the value is very low. Cryptocurrencies can be used to transfer coins to other people and also can be made to fiat money with minimum limits. So as a result cryptocurrencies are subjected to scams very often.

Because of the reason of crypto market subjecting to high-risk people should invest in crypto after very careful research and understanding of the coin or token that they are going to buy.

Explain The various Types of crypto Scam

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According to the study that I did about crypto scams I found that there are three types of crypto scams:

• A fake exchange application or website
• A fake token
• Pay scammers by using crypto

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Fake exchange Applications or websites

• Scamming web pages may try to get your data from the wallets and steal the cryptocurrencies that you have.
• They may create investment opportunities by showing high rates in coins and once you invest in them the value goes down and ultimately you lose your cryptocurrencies.
• There can be fake applications that lead you to download them and get your details so that they can steal your coins.

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Fake Tokens

• Scam Tokens may available in the wallets of traders and they can worth huge amounts. When traders try to take them to their wallets the scammers can steal the keys.

• A rug pull scam is a scam that is done using an Initial coin offering published through social media marketing. Here the scammer will cash out the coins once he gets a certain high amount.

• Ponzi scheme is a type of scam that is handled by pretending the investors will get large return amounts but it is continued only a few times and after that investors lose their coins.

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Crypto Pay Scammers

• Payment requests can be sent to crypto traders asking to do the payments in Cryptocurrencies. These are mostly happening in online or work-from-home jobs.

• Giveaways can be posted in social media asking to multiply the invested crypto by investing with them but they are also scams.

• Blackmailing is also often in crypto scams. Those who do the scams say that our personal information is with them and ask for crypto payments.

Have You Ever Be Scammed Before? Or Have A Person That You Know Ever Be Scammed? Explain To Us The Incident.

I have not actually engaged much in the cryptocurrency trading industry so I'm still researching for scams and finding incidents where I can find examples of scams. So far I have not met any person who has subjected to scams.

How Can One Protect Himself From Crypto Scam

In my opinion, there can be a few ways that we can minimize the threat of scams, and maybe it is helpful to avoid being subjected to scams. Some of those ways are:

• Beware of social media advertisements.
• You can search google for the coins or tokens and get a better knowledge about the cryptocurrencies that you are going to invest in.
• When you get to know about a new coin you should read its whitepaper to review the coin. Here you will get an idea of whether it is a secure coin or not.
• Investors also can read the websites carefully before entering into investments.
• Traders should think twice if any firm is asking for payments in cryptocurrencies.
• Most important is when a firm says they offer high returns for less risky coins then there is a fact that investors should pay attention to.
• It is good to be restricted from connecting your crypto wallets with browser ads.
• Traders are safe when they work only with the coins that they know and neglect the new coins with unusual benefits.

I think identifying the scams and the ways of protecting them will help traders and investors to have a long journey in cryptocurrency. This is the end of my post. Thank you for reading and have a nice day.